The Cool Down of the Housing Market in Austin, Texas
They say everything is bigger in Texas, the longtime saying resonates within the real estate market of the bustling capital city. However, is it fair to say that the hot stove action of this area’s housing market has slowed down?
According to Redfin, there were 707 homes sold in October this year, down from 1,183 last year. On average, homes in Austin sell after 54 days on the market compared to 35 days last year. This doesn’t mean that the market for Austin has completely fallen off, but according to these numbers that is nearly half of what was reported one year ago. Note, this decline in numbers has just started as of recent as of May of this year.
Austin was amongst one of the fastest growing cities in the U.S. during the pandemic. It was a busy time for the city during this time that many people sought out due to its well-rounded offerings. Since the Federal Reserve began raising interest rates to try and slow down inflation, this then had a chain reaction in pushing mortgage rates higher too.
So why has the housing market shifted in a direction towards the dust settling. According to Redfin Senior Economist Sheharyar Bokhari, “The forces slowing the housing market, such as high mortgage rates, are having an outsized impact on places like Austin and Boise that saw home prices skyrocket over the last few years”. “Home prices can only rise by double digits for so long before the growth becomes unsustainable. High rates and stumbling tech stocks are making it unsustainable quite quickly, especially in destinations popular with tech workers. Plus, many of the out-of-towners with big budgets who wanted to move into those places already have.”
The dust has settled for now in the market of Austin. Due to the increase in interest rates, it has pushed both buyers and sellers out. Buyers are waiting for prices to possibly be lower in the near future. This is in part due to the economy and the shift of the market. Austin still has so much potential to continue its strong growth and remain a name at the top for the housing market.